If a debt collector alleges that you owe a debt, then never say, "I do" to him. This will be interpreted as the acknowledgement of debt. The collector will create pressure upon you to pay off the debt.

You don't owe a debt simply because the debt collector makes such a claim. Instead of acknowledging the debt, ask the collector to validate the debt, and that too in writing.

If the debt is validated, then make arrangements to repay it as soon as possible. If the debt is not valid, then don't spend a dime. You need the money for other purposes.

Tip no 2: Protect yourself when you become a co-signer. Otherwise, be ready to face your financial doom.

It's a bad money decision to become a co-signer on a loan. However, if you’ve still decided to become a co-signer on a loan, then take steps to protect yourself from a financial doom. Check the credit report of the borrower and find out if he makes payments on the accounts timely. Find out if he has too many delinquent accounts.

If you find that the borrower has too many debts, then ask the borrower about them. If you don't get a satisfactory reply, then ask him to pledge collateral against the loan. For instance: a car or any other asset. If the borrower fails to make payments, then you can sell the asset and use the money to pay back the creditor. Check his credit report from time to time to know if he is sending payments regularly.

Tip no 3: When you're in debt, devise a plan and execute it to be your own master. Don't be a slave of the lender. Have your free will.

You lose your independence when you're entrapped in debt. If you want to regain your freedom, then create a plan to get out of debt. Make sure your plan is a logical one. An illogical and impractical plan won't help you achieve your desired result. Once you have chalked out the plan to enter into a debt free life, it's time to execute it properly.

A well-made plan will not be of any use if it is not executed. For instance, you plan to pay $200 to your creditors every month. However, you forget to pay the amount to your creditors in reality. You'll never get out of debt, as your creditors are not receiving any payments at all.

Tip no 4: Learn to say "no" to your friends who are always in need of financial help. Take care of your financial health before helping others.

There is a well-known proverb called a "friend in need is a friend indeed". When your friend is in trouble, it's your duty to help him. However, if your friend has the habit of getting into financial troubles, then it's wise to take a few steps back from him. Your friend will never learn to solve problems on his own if you keep on helping him out. He'll never learn from his mistakes and will come to you for financial help.

Point out the mistake to your friend instead of giving a loan. Tell him the ways to rectify the mistake, but don't get directly involved in the problem.

Bad money decisions like borrowing more than your affordability, becoming a co-signer on a loan, taking out a payday loan, making wrong investments, etc. will destroy your money tree. So avoid making such decisions. Find out what is happening in the financial world before making a financial decision. Get free financial information from different websites. These will help you make a correct financial decision.

If you've any doubt, then participate in financial forums and ask your question. The financial experts will give the right answers to your questions. You'll get the right advice and be able to make proper decisions about money.